The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. “What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region,” he said….
The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007. The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.
Notice that while the national news is good, the news in the West is even better. How about Las Vegas? It’s been a while since I reported on pending sales. Good news there: they hit another record high. There are today more than 4000 contingent sales and 2800 pending sales active in Las Vegas, on top of the 3000+ units that closed last month, and the 537 units that have already closed so far in October.
Look at the upturn:
Sure, most of these are foreclosures, but that misses the point. The first precondition necessary for a real estate recovery is strong demand and strong buying activity. These numbers are trending in the right direction.